Studios form digital-download "ecosystem"

<p>The water tower at Paramount Pictures Studios, a division of Viacom, Inc. is pictured in Los Angeles, California July 29, 2008.Fred Prouser</p>

LOS ANGELES (Hollywood Reporter) - Hollywood is challenging the hegemony of Apple in digital distribution. A consortium of major studios -- excluding key Apple ally Walt Disney Co. -- is teaming up with leading retailers and consumer-electronics firms to essentially transform the paid download into an experience akin to buying a DVD. The goal is letting video purchased at any outlet be played on any device worldwide.

Known as the Digital Entertainment Content Ecosystem (DECE), the consortium brings together Warner Bros. Entertainment, Fox Entertainment Group, NBC Universal, Sony, Paramount Pictures and Comcast Corp. with retailer Best Buy along with tech giants Microsoft, Hewlett-Packard, Cisco, Philips, Toshiba and Verisign. Each company has an invested an unspecified sum in the endeavor.

"When we start to bundle these digital rights together, we believe we can actually develop and deliver a product to the consumer that's better than free," said Mitch Singer, chief technology officer at Sony Pictures and the lead architect of DECE.

All together, they are mounting what may be the most radical redefinition yet of digital rights management. In its current form, DRM largely confines content to a limited number of devices depending on the source of that content. For instance, a song purchased on Apple's iTunes can be accessed on no more than five different computers and can't be legally played on a portable device beyond the iPod.

If DECE takes hold, it would institute several precedent-setting principles:

-- Participating devices and services will be interoperable regardless of differing brands or corporate provenance. A TV episode, for instance, could be just as easily accessed on Microsoft's Zune as it would a Philips broadband-enabled TV set.

-- DECE would allow an unlimited number of copies of a video to be created or burned onto a disc.

-- The consumer would even have the option of not storing the copy at all, but rather streaming it from a server-based "rights locker" that can be tapped from any location.

-- DECE would create open standards whereby any company that chose to create contents or services can do so to available specifications.

Freeing up digital content would also offer a marked distinction from the rights offered by market leader Apple under its Fairplay system. Apple's dominance of the digital marketplace also affords it considerable leverage in licensing negotiations over many of the studios involved in DECE.

"While we haven't yet had conversations with them about joining, we'd love to have them," said Singer, who added that DECE has reached out to Disney. "We're going in a slightly different direction than Apple by offering more choice in terms of storefront and device."

Other prominent companies not named to DECE: CBS Corp., Amazon, Walmart and leading telcos such as AT&T and Verizon. While not every company that hasn't joined has even been approached yet, those that have aren't necessarily opposed to DECE, according to Singer.

"If I had to characterize it, it's more of a wait-and-see mode than something they don't want to be involved in," he said.

But DECE is aimed just as much at providing an alternative to piracy as it is competing with Apple. Rampant illegal downloading has long been seen as an outgrowth of today's fragmented digital marketplace, which stymies consumers by requiring content providers to tailor their product for each distributor.

DECE represents yet another ambitious attempt by Hollywood to avoid the fate of the music industry, which has largely dropped DRM altogether. The consortium aims to give digital distribution a shot in the arm. For all the success of iTunes, XBox and Amazon, their collective sales haven't matched the growth curve experienced by DVD.

DECE plans to announce a brand name and logo, as well as a more detailed plan, at the upcoming Consumers Electronics Show in January. It also expects to name more companies to the consortium in the coming months.

Singer said he has began developing DECE inside Sony Pictures six years ago, constantly changing the formulation to meet the latest technologies. Outreach to other companies started in 2006.